I have a couple of questions. As we understand it, when you first came into office, you'd just been through a very difficult campaign. In that campaign, neither the president nor the opponent, to the best of my knowledge, ever mentioned al Qaeda... There had been almost no congressional action or hearings about al Qaeda, very little bit in the newspapers.

And yet, you walk in and Dick Clarke is talking about al Qaeda should be our number-one priority. Sandy Berger tells you you'll be spending more time on that than anything else.

What did you think, and what did you tell the president, as you get that kind of, I suppose, new information for you?

RICE: Well, in fact, Mr. Chairman, it was not new information. I think we all knew about the 1998 bombings. We knew that there was speculation that the 2000 Cole attack was al Qaeda. There had been, I think, documentaries about Osama bin Laden.

I, myself, had written for an introduction to a volume on bioterrorism done at Stanford that I thought that we wanted not to wake up one day and find that Osama bin Laden had succeeded on our soil.

It was on the radar screen of any person who studied or worked in the international security field.

But there is no doubt that I think the briefing by Dick Clarke, the earlier briefing during the transition by Director Tenet, and of course what we talked with about Sandy Berger, it gave you a heightened sense of the problem and a sense that this was something that the United States had to deal with.

I have to say that of course there were other priorities. And indeed, in the briefings with the Clinton administration, they emphasized other priorities: North Korea, the Middle East, the Balkans.

One doesn't have the luxury of dealing only with one issue if you are the United States of America. There are many urgent and important issues.

But we all had a strong sense that this was a very crucial issue. The question was, what do you then do about it?

And the decision that we made was to, first of all, have no drop-off in what the Clinton administration was doing, because clearly they had done a lot of work to deal with this very important priority.

And so we kept the counterterrorism team on board. We knew that George Tenet was there. We had the comfort of knowing that Louis Freeh was there.

And then we set out -- I talked to Dick Clarke almost immediately after his -- or, I should say, shortly after his memo to me saying that al Qaeda was a major threat, we set out to try and craft a better strategy.

But we were quite cognizant of this group, of the fact that something had to be done.

I do think, early on in these discussions, we asked a lot of questions about whether Osama bin Laden himself ought to be so much the target of interest, or whether what was that going to do to the organization if, in fact, he was put out of commission. And I remember very well the director saying to President Bush, "Well, it would help, but it would not stop attacks by al Qaeda, nor destroy the network."

KEAN: I've got a question now I'd like to ask you. It was given to me by a number of members of the families.

Did you ever see or hear from the FBI, from the CIA, from any other intelligence agency, any memos or discussions or anything else between the time you got into office and 9/11 that talked about using planes as bombs?

RICE: Let me address this question because it has been on the table.

I think that concern about what I might have known or we might have known was provoked by some statements that I made in a press conference. I was in a press conference to try and describe the August 6th memo, which I've talked about here in my opening remarks and which I talked about with you in the private session.

And I said, at one point, that this was a historical memo, that it was -- it was not based on new threat information. And I said, "No one could have imagined them taking a plane, slamming it into the Pentagon" -- I'm paraphrasing now -- "into the World Trade Center, using planes as a missile."

As I said to you in the private session, I probably should have said, "I could not have imagined," because within two days, people started to come to me and say, "Oh, but there were these reports in 1998 and 1999. The intelligence community did look at information about this."

To the best of my knowledge, Mr. Chairman, this kind of analysis about the use of airplanes as weapons actually was never briefed to us.

I cannot tell you that there might not have been a report here or a report there that reached somebody in our midst.

Part of the problem is -- and I think Sandy Berger made this point when he was asked the same question -- that you have thousands of pieces of information -- car bombs and this method and that method -- and you have to depend to a certain degree on the intelligence agencies to sort to tell you what is actually relevant, what is actually based on sound sources, what is speculative.

And I can only assume or believe that perhaps the intelligence agencies thought that the sourcing was speculative.

All that I can tell you is that it was not in the August 6th memo, using planes as a weapon. And I do not remember any reports to us, a kind of strategic warning, that planes might be used as weapons. In fact, there were some reports done in '98 and '99. I was certainly not aware of them at the time that I spoke.

KEAN: You didn't see any memos to you or any documents to you?

RICE: No, I did not.

KEAN: Some Americans have wondered whether you or the president worried too much about Iraq in the days after the 9/11 attack and perhaps not enough about the fight ahead against al Qaeda.

We know that at the Camp David meeting on the weekend of September 15th and 16th, the president rejected the idea of immediate action against Iraq. Others have told that the president decided Afghanistan had to come first.

We also know that, even after those Camp David meetings, the administration was still readying plans for possible action against Iraq.

So can you help us understand where, in those early days after 9/11, the administration placed Iraq in the strategy for responding to the attack?

RICE: Certainly. Let me start with the period in which you're trying to figure out who did this to you.

And I think, given our exceedingly hostile relationship with Iraq at the time -- this is, after all, a place that tried to assassinate an American president, was still shooting at our planes in the no-fly zone -- it was a reasonable question to ask whether, indeed, Iraq might have been behind this.

I remember, later on, in a conversation with Prime Minister Blair, President Bush also said that he wondered could it have been Iran, because the attack was so sophisticated, was this really just a network that had done this.

When we got to Camp David -- and let me just be very clear: In the days between September 11th and getting to Camp David, I was with the president a lot. I know what was on his mind. What was on his mind was follow-on attacks, trying to reassure the American people.

He virtually badgered poor Larry Lindsey about when could we get Wall Street back up and running, because he didn't want them to have succeeded against our financial system. We were concerned about air security, and he worked very hard on trying to get particularly Reagan reopened. So there was a lot on our minds.

But by the time that we got to Camp David and began to plan for what we would do in response, what was rolled out on the table was Afghanistan -- a map of Afghanistan.

And I will tell you, that was a daunting enough task to figure out how to avoid some of the pitfalls that great powers had in Afghanistan, mostly recently the Soviet Union and, of course, the British before that.

There was a discussion of Iraq. I think it was raised by Don Rumsfeld. It was pressed a bit by Paul Wolfowitz. Given that this was a global war on terror, should we look not just at Afghanistan but should we look at doing something against Iraq? There was a discussion of that.

The president listened to all of his advisers. I can tell you that when he went around the table and asked his advisers what he should do, not a single one of his principal advisers advised doing anything against Iraq. It was all to Afghanistan.

When I got back to the White House with the president, he laid out for me what he wanted to do. And one of the points, after a long list of things about Afghanistan, a long list of things about protecting the homeland, the president said that he wanted contingency plans against Iraq should Iraq act against our interests.

There was a kind of concern that they might try and take advantage of us in that period. They were still -- we were still flying no-fly zones. And there was also, he said, in case we find that they were behind 9/11, we should have contingency plans.

But this was not along the lines of what later was discussed about Iraq, which was how to deal with Iraq on a grand scale. This was really about -- we went to planning Afghanistan, you can look at what we did. From that time on, this was about Afghanistan.

KEAN: So when Mr. Clarke writes that the president pushed him to find a link between Iraq and the attack, is that right? Was the president trying to twist the facts for an Iraqi war, or was he just puzzled about what was behind this attack?

RICE: I don't remember the discussion that Dick Clarke relates. Initially, he said that the president was wandering the situation room -- this is in the book, I gather -- looking for something to do, and they had a conversation. Later on, he said that he was pulled aside. So I don't know the context of the discussion. I don't personally remember it.

But it's not surprising that the president would say, "What about Iraq," given our hostile relationship with Iraq. And I'm quite certain that the president never pushed anybody to twist the facts.

KEAN: Congressman Hamilton?

HAMILTON: Thank you, Mr. Chairman.

Dr. Rice, you've given us a very strong statement, with regard to the actions taken by the administration in this pre-9/11 period, and we appreciate that very much for the record.

I want to call to your attention some comments and some events on the other side of that question and give you an opportunity to respond.

You know very well that the commission is focusing on this whole question of, what priority did the Clinton administration and the Bush administration give to terrorism?

The president told Bob Woodward that he did not feel that sense of urgency. I think that's a quote from his book, or roughly a quote from Woodward's book.

The deputy director for Central Intelligence, Mr. McLaughlin, told us that he was concerned about the pace of policymaking in the summer of 2001, given the urgency of the threat.

The deputy secretary of state, Mr. Armitage, was here and expressed his concerns about the speed of the process. And if I recall, his comment is that, "We weren't going fast enough." I think that's a direct quote.

There was no response to the Cole attack in the Clinton administration and none in the Bush administration.

Your public statements focused largely on China and Russia and missile defense. You did make comments on terrorism, but they were connected -- the link between terrorism and the rogue regimes, like North Korea and Iran and Iraq.

And by our count here, there were some 100 meetings by the national security principals before the first meeting was held on terrorism, September 4th. And General Shelton, who was chairman of the Joint Chiefs, said that terrorism had been pushed farther to the back burner.

Now, this is what we're trying to assess. We have your statements. We have these other statements. And I know, as I indicated in my opening comments, how difficult the role of the policymaker is and how many things press upon you.

But I did want to give you an opportunity to comment on some of these other matters.

RICE: Thank you very much, Mr. Chairman.

Let me begin with the Woodward quote, because that has gotten a lot of press. And I actually think that the quote, put in context, gives a very different picture.

The question that the president was asked by Mr. Woodward was, "Did you want to have bin Laden killed before September 11th?" That was the question.

The president said, "Well, I hadn't seen a plan to do that. I knew that we needed to -- I think the appropriate word is 'bring him to justice.' And, of course, this is something of a trick question in that notion of self-defense which is appropriate for..."

I think you can see here a president struggling with whether he ought to be talking about pre-9/11 attempts to kill bin Laden. And so, that is the context for this quote.

And, quite frankly, I remember the director sitting here and saying he didn't want to talk about authorities on assassination. I think you can understand the discomfort of the president.

The president goes on. When Bob Woodward says, "Well, I don't mean it as a trick question; I'm just trying to your state of mind," the president says, "Let me put it this way. I was not -- there was a significant difference in my attitude after September 11th. I was not on point, but I knew he was a menace and I knew he was a problem. I knew he was responsible. We felt he was responsible for bombings that had killed Americans. And I was prepared to look at a plan that would be a thoughtful plan that would bring him to justice and would have given the order to do just that.

"I have no hesitancy about going after him, but I didn't feel that sense of urgency and my blood was not nearly as boiling. Whose blood was nearly as boiling prior to September 11th?"

And I think the context helps here.

It is also the case that the president had been told by the director of central intelligence that it was not going to be a silver bullet to kill bin Laden, that you had to do much more.

And, in fact, I think that some of us felt that the focus, so much focus, on what you did with bin Laden, not what you did with the network, not what you did with the regional circumstances, might, in fact, have been misplaced.

So I think the president is responding to a specific set of questions.

All that I can tell you is that what the president wanted was a plan to eliminate al Qaeda so he could stop swatting at flies. He knew that we had in place the same crisis-management mechanism, indeed the same personnel, that the Clinton administration, which clearly thought it a very high priority, had in place.

And so, I think that he saw the priority as continuing the current operations and then getting a plan in place.

Now, as to the number of PCs. I'm sorry, there is some difference in our records here.

We show 33 Principals Committee meetings during this period of time, not 100. We show that three of those dealt at least partially with issues of terrorism not related to al Qaeda. And so we can check the numbers, but we have looked at our files and we show 33, not 100.

The quotes by others about how the process is moving, again, it's important to realize that [we] had parallel tracks here. We were continuing to do what the Clinton administration had been doing under all the same authorities that were operating. George Tenet was continuing to try to disrupt al Qaeda. We were continuing the diplomatic efforts.

But we did want to take the time to get in place a policy that was more strategic toward al Qaeda, more robust. It takes some time to think about how to reorient your policy toward Pakistan. It takes some time to think about how to have a more effective policy toward Afghanistan. It particularly takes some time when you don't get your people on board for several months.

So I understand that there are those who have said they felt it wasn't moving along fast enough. I talked to George Tenet about this at least every couple of weeks, sometimes more often. How can we move forward on the Predator? What do you want to do about the Northern Alliance? So I think we were putting the energy into it.

And I should just make one other point, Mr. Hamilton, if you don't mind, which is that we also moved forward on some of the specific ideas that Dick Clarke had put forward prior to completing the strategy review. We increased assistance to Uzbekistan, for instance, which had been one of the recommendations. We moved along the armed Predator, the development of the armed Predator. We increased counterterrorism funding.

But there were a couple of things that we did not want to do.

I'm now convinced that, while nothing that in this strategy would have done anything about 9/11, if we had, in fact, moved on the things that were in the original memos that we got from our counterterrorism people, we might have even gone off course, because it was very Northern Alliance-focused. That was going to cause a huge problem with Pakistan. It was not going to put us in the center of action in Afghanistan, which is the south.

And so, we simply had to take some time to get this right. But I think we need not confuse that with either what we did during the threat period where we were urgently working the operational issues every day or with the continuation of the Clinton policy.

HAMILTON: Well, I thank you for a careful answer.

Another question. At the end of the day, of course, we were unable to protect our people. And you suggest in your statement -- and I want you to elaborate on this, if you want to -- that in hindsight it would have been --etter information about the threats would have been the single -- the single most important thing for us to have done, from your point of view, prior to 9/11, would have been better intelligence, better information about the threats.

Is that right? Are there other things that you think stand out?

RICE: Well, Mr. Chairman, I took an oath of office on the day that I took this job to protect and defend. And like most government officials, I take it very seriously. And so, as you might imagine, I've asked myself a thousand times what more we could have done.

I know that, had we thought that there was an attack coming in Washington or New York, we would have moved heaven and earth to try and stop it. And I know that there was no single thing that might have prevented that attack.

In looking back, I believe that the absence of light, so to speak, on what was going on inside the country, the inability to connect the dots, was really structural. We couldn't be dependent on chance that something might come together.

And the legal impediments and the bureaucratic impediments -- but I want to emphasize the legal impediments. To keep the FBI and the CIA from functioning really as one, so that there was no seam between domestic and foreign intelligence, was probably the greatest one.

The director of central intelligence and I think Director Freeh had an excellent relationship. They were trying hard to bridge that seam. I know that Louis Freeh had developed legal attaches abroad to try to help bridge that.

But when it came right down to it, this country, for reasons of history and culture and therefore law, had an allergy to the notion of domestic intelligence, and we were organized on that basis. And it just made it very hard to have all of the pieces come together.

We've made good changes since then. I think that having a Homeland Security Department that can bring together the FAA and the INS and Customs and all of the various agencies is a very important step.

I think that the creation of the terrorism threat information center, which brings together all of the intelligence from various aspects, is a very important step forward.

Clearly, the Patriot Act, which has allowed the kind of sharing, indeed demands the kind of sharing between intelligence agencies, including the FBI and the CIA, is a very big step forward.

I think one thing that we will learn from you is whether the structural work is done.

HAMILTON: Final question would be: One of your sentences kind of jumped out at me in your statement, and that was on page 9, where you said, "We must address the source of the problem."

I'm very concerned about that. I was pleased to see it in your statement. And I'm very worried about the threat of terrorism, as I know you are, over a very long period of time -- a generation or more.

There are a lot of very, very fine -- 2 billion Muslims. Most of them, we know, are very fine people. Some don't like us; they hate us. They don't like what modernization does to their culture. They don't like the fact that economic prosperity has passed them by. They don't like some of the policies of the United States government. They don't like the way their own governments treat them.

And I'd like you to elaborate a little bit, if you would, on how we get at the source of the problem. How do we get at this discontent, this dislocation, if you would, across a big swathe of the Islamic world?

RICE: I believe very strongly, and the president believes very strongly, that this is really the generational challenge. The kinds of issues that you are addressing have to be addressed, but we're not going to see success on our watch.

We will see some small victories on our watch. One of the most difficult problems in the Middle East is that the United States has been associated for a long time, decades, with a policy that looks the other way on the freedom deficit in the Middle East, that looks the other way at the absence of individual liberties in the Middle East.

And I think that that has tended to alienate us from the populations of the Middle East.

And when the president, at White Hall in London, said that that was no longer going to be the stance of the United States, we were expecting more from our friends, we were going to try and engage those in those countries who wanted to have a different kind of Middle East, I believe that he was resonating with trends that are there in the Middle East. There are reformist trends in places like Bahrain and Jordan. And recently there was a marvelous conference in Alexandria in Egypt, where reform was actually was on the agenda.

So it's going to be a slow process. We know that the building of democracy is tough. It doesn't come easily. We have our own history. When our Founding Fathers said, "We the people," they didn't mean me. It's taken us a while to get to a multiethnic democracy that works.

But if America is avowedly values-centered in its foreign policy, we do better than when we do not stand up for those values.

So I think that it's going to be very hard. It's going to take time.

One of the things that we've been very interested, for instance, in is issues of educational reform in some of these countries. As you know, the madrassas are a big difficulty. I've met, myself, personally two or three times with the Pakistani -- a wonderful woman who's the Pakistani education minister.

We can't do it for them. They have to have it for themselves, but we have to stand for those values.

And over the long run, we will change -- I believe we will change the nature of the Middle East, particularly if there are examples that this can work in the Middle East.

And this is why Iraq is so important. The Iraqi people are struggling to find a way to create a multiethnic democracy that works. And it's going to be hard.

And if we stay with them, and when they succeed, I think we will have made a big change -- they will have made a big change in the middle of the Arab world, and we will be on our way to addressing the source.

HAMILTON: Thank you, Dr. Rice.

Thank you, Mr. Chairman.

KEAN: Thank you.

Commissioner Ben-Veniste.

BEN-VENISTE: Good morning, Dr. Rice.

RICE: Good morning.

BEN-VENISTE: Nice to see you again.

RICE: Nice to see you.

BEN-VENISTE: I want to ask you some questions about the August 6, 2001, PDB. We had been advised in writing by CIA on March 19, 2004, that the August 6th PDB was prepared and self-generated by a CIA employee. Following Director Tenet's testimony on March 26th before us, the CIA clarified its version of events, saying that questions by the president prompted them to prepare the August 6th PDB.

Now, you have said to us in our meeting together earlier in February, that the president directed the CIA to prepare the August 6th PDB.

The extraordinary high terrorist attack threat level in the summer of 2001 is well-documented. And Richard Clarke's testimony about the possibility of an attack against the United States homeland was repeatedly discussed from May to August within the intelligence community, and that is well-documented.

You acknowledged to us in your interview of February 7, 2004, that Richard Clarke told you that al Qaeda cells were in the United States.

Did you tell the president, at any time prior to August 6th, of the existence of al Qaeda cells in the United States?

RICE: First, let me just make certain...

BEN-VENISTE: If you could just answer that question, because I only have a very limited...

RICE: I understand, Commissioner, but it's important...

BEN-VENISTE: Did you tell the president...

RICE: ... that I also address...

(APPLAUSE)

It's also important that, Commissioner, that I address the other issues that you have raised. So I will do it quickly, but if you'll just give me a moment.

BEN-VENISTE: Well, my only question to you is whether you...

RICE: I understand, Commissioner, but I will...

BEN-VENISTE: ... told the president.

RICE: If you'll just give me a moment, I will address fully the questions that you've asked.

First of all, yes, the August 6th PDB was in response to questions of the president -- and that since he asked that this be done. It was not a particular threat report. And there was historical information in there about various aspects of al Qaeda's operations.

Dick Clarke had told me, I think in a memorandum -- I remember it as being only a line or two -- that there were al Qaeda cells in the United States.

Now, the question is, what did we need to do about that?

And I also understood that that was what the FBI was doing, that the FBI was pursuing these al Qaeda cells. I believe in the August 6th memorandum it says that there were 70 full field investigations under way of these cells. And so there was no recommendation that we do something about this; the FBI was pursuing it.

I really don't remember, Commissioner, whether I discussed this with the president.

BEN-VENISTE: Thank you.

RICE: I remember very well that the president was aware that there were issues inside the United States. He talked to people about this. But I don't remember the al Qaeda cells as being something that we were told we needed to do something about.

BEN-VENISTE: Isn't it a fact, Dr. Rice, that the August 6th PDB warned against possible attacks in this country? And I ask you whether you recall the title of that PDB?

RICE: I believe the title was, "Bin Laden Determined to Attack Inside the United States."

Now, the...

BEN-VENISTE: Thank you.

RICE: No, Mr. Ben-Veniste...

BEN-VENISTE: I will get into the...

RICE: I would like to finish my point here.

BEN-VENISTE: I didn't know there was a point.

RICE: Given that -- you asked me whether or not it warned of attacks.

BEN-VENISTE: I asked you what the title was.

RICE: You said, did it not warn of attacks. It did not warn of attacks inside the United States. It was historical information based on old reporting. There was no new threat information. And it did not, in fact, warn of any coming attacks inside the United States.

BEN-VENISTE: Now, you knew by August 2001 of al Qaeda involvement in the first World Trade Center bombing, is that correct?

You knew that in 1999, late '99, in the millennium threat period, that we had thwarted an al Qaeda attempt to blow up Los Angeles International Airport and thwarted cells operating in Brooklyn, New York, and Boston, Massachusetts.

As of the August 6th briefing, you learned that al Qaeda members have resided or travelled to the United States for years and maintained a support system in the United States.

And you learned that FBI information since the 1998 blind sheikh warning of hijackings to free the blind sheikh indicated a pattern of suspicious activity in the country up until August 6th consistent with preparation for hijackings. Isn't that so?

RICE: Do you have other questions that you want me to answer as a part of the sequence?

BEN-VENISTE: Well, did you not -- you have indicated here that this was some historical document. And I am asking you whether it is not the case that you learned in the PDB memo of August 6th that the FBI was saying that it had information suggesting that preparations -- not historically, but ongoing, along with these numerous full field investigations against al Qaeda cells, that preparations were being made consistent with hijackings within the United States?

RICE: What the August 6th PDB said, and perhaps I should read it to you...

BEN-VENISTE: We would be happy to have it declassified in full at this time, including its title.

(APPLAUSE)

RICE: I believe, Mr. Ben-Veniste, that you've had access to this PDB. But let me just...

BEN-VENISTE: But we have not had it declassified so that it can be shown publicly, as you know.

BEN-VENISTE: Nor could we, prior to today, reveal the title of that PDB.

RICE: May I address the question, sir?

The fact is that this August 6th PDB was in response to the president's questions about whether or not something might happen or something might be planned by al Qaeda inside the United States. He asked because all of the threat reporting or the threat reporting that was actionable was about the threats abroad, not about the United States.

This particular PDB had a long section on what bin Laden had wanted to do -- speculative, much of it -- in '97, '98; that he had, in fact, liked the results of the 1993 bombing.

It had a number of discussions of -- it had a discussion of whether or not they might use hijacking to try and free a prisoner who was being held in the United States -- Ressam. It reported that the FBI had full field investigations under way.

And we checked on the issue of whether or not there was something going on with surveillance of buildings, and we were told, I believe, that the issue was the courthouse in which this might take place.

Commissioner, this was not a warning. This was a historic memo -- historical memo prepared by the agency because the president was asking questions about what we knew about the inside.

BEN-VENISTE: Well, if you are willing...

RICE: Now, we had already taken...

BEN-VENISTE: If you are willing to declassify that document, then others can make up their minds about it.

Let me ask you a general matter, beyond the fact that this memorandum provided information, not speculative, but based on intelligence information, that bin Laden had threatened to attack the United States and specifically Washington, D.C.

There was nothing reassuring, was there, in that PDB?

RICE: Certainly not. There was nothing reassuring.

But I can also tell you that there was nothing in this memo that suggested that an attack was coming on New York or Washington, D.C. There was nothing in this memo as to time, place, how or where. This was not a threat report to the president or a threat report to me.

BEN-VENISTE: We agree that there were no specifics. Let me move on, if I may.

RICE: There were no specifics, and, in fact, the country had already taken steps through the FAA to warn of potential hijackings. The country had already taken steps through the FBI to task their 56 field offices to increase their activity. The country had taken the steps that it could given that there was no threat reporting about what might happen inside the United States.

BEN-VENISTE: We have explored that and we will continue to with respect to the muscularity and the specifics of those efforts.

The president was in Crawford, Texas, at the time he received the PDB, you were not with him, correct?

RICE: That is correct.

BEN-VENISTE: Now, was the president, in words or substance, alarmed or in any way motivated to take any action, such as meeting with the director of the FBI, meeting with the attorney general, as a result of receiving the information contained in the PDB?

RICE: I want to repeat that when this document was presented, it was presented as, yes, there were some frightening things -- and by the way, I was not at Crawford, but the president and I were in contact and I might have even been, though I can't remember, with him by video link during that time.

The president was told this is historical information. I'm told he was told this is historical information and there was nothing actionable in this. The president knew that the FBI was pursuing this issue. The president knew that the director of central intelligence was pursuing this issue. And there was no new threat information in this document to pursue.

BEN-VENISTE: Final question, because my time has almost expired.

Do you believe that, had the president taken action to issue a directive to the director of CIA to ensure that the FBI had pulsed the agency, to make sure that any information which we know now had been collected was transmitted to the director, that the president might have been able to receive information from CIA with respect to the fact that two al Qaeda operatives who took part in the 9/11 catastrophe were in the United States -- Alhazmi and Mihdhar; and that Moussaoui, who Dick Clarke was never even made aware of, who had jihadist connections, who the FBI had arrested, and who had been in a flight school in Minnesota trying to learn the avionics of a commercial jetliner despite the fact that he had no training previously, had no explanation for the funds in his bank account, and no explanation for why he was in the United States -- would that have possibly, in your view, in hindsight, made a difference in the ability to collect this information, shake the trees, as Richard Clarke had said, and possibly, possibly interrupt the plotters?

RICE: My view, Commissioner Ben-Veniste, as I said to Chairman Kean, is that, first of all, the director of central intelligence and the director of the FBI, given the level of threat, were doing what they thought they could do to deal with the threat that we faced.

There was no threat reporting of any substance about an attack coming in the United States.

And the director of the FBI and the director of the CIA, had they received information, I am quite certain -- given that the director of the CIA met frequently face to face with the president of the United States -- that he would have made that available to the president or to me.

I do not believe that it is a good analysis to go back and assume that somehow maybe we would have gotten lucky by, quote, "shaking the trees." Dick Clarke was shaking the trees, director of central intelligence was shaking the trees, director of the FBI was shaking the trees. We had a structural problem in the United States.

BEN-VENISTE: Did the president meet with the director of the FBI?

RICE: We had a structural problem in the United States, and that structural problem was that we did not share domestic and foreign intelligence in a way to make a product for policymakers, for good reasons -- for legal reasons, for cultural reasons -- a product that people could depend upon.

BEN-VENISTE: Did the president meet with the director of...

KEAN: Commissioner, we got to move on...

BEN-VENISTE: ... the FBI between August 6th and September 11th?

KEAN: ... to Commissioner Fielding.

RICE: I will have to get back to you on that. I am not certain.

KEAN: Commissioner Fielding?

FIELDING: Thank you, Mr. Chairman.

Dr. Rice, good morning.

RICE: Good morning.

FIELDING: Thank you for being here, and thank you for all your service presently and in the past to your country.

RICE: Thank you.

FIELDING: As you know, our task is to assemble facts in order to inform ourselves and then ultimately to inform the American public of the cause of this horrible event, and also to make recommendations to mitigate against the possibility that there will ever be another terrorist triumph on our homeland or against our people.

And as we do this with the aid of testimony of people like yourself, of course there will be some discrepancies, as there always will, and we will have to try as best we can to resolve those discrepancies. And obviously that's an important thing for us to do.

But as important as that ultimately might be, it also is our responsibility to really come up with ways, and valid ways, to prevent another intelligence failure like we suffered. And I don't think anybody will kid ourselves that we didn't suffer one.

So we must try to look at the systems and the policies that were in place and to evaluate them and to see -- getting a view of the landscape, and I know it's difficult to do it through a pre-9/11 lens, but we must try to do that, so that we can do better the next time.

And I'd like to follow up with a couple of areas with that sort of specificity, and one is the one that you were just discussing with Commissioner Ben-Veniste.

We've all heard over the years the problem between the CIA, the FBI, coordination, et cetera. And you made reference to an introduction you'd done to a book, but you also, in October 2000, while you were a part of the campaign team for candidate Bush, you told a radio station, WJR, which is in Detroit, you're talking about the threat and how to deal with al Qaeda.

And if I may quote, you said, "Osama bin Laden, the first is you really have to get intelligence agencies better organized to deal with the terrorist threat to the United States itself. One of the problems that we have is kind of a split responsibility, of course, between the CIA and foreign intelligence and the FBI and domestic intelligence. There needs to be better cooperation, because we don't want to wake up one day and find that Osama bin Laden has been successful on our territory," end of your quote.

Well, in fact, sadly, we did wake up and that did happen.

And obviously, there is a systemic problem.

And what I'd really like you to address right now is what steps were taken by you and the administration, to your knowledge, in the first several months of the administration to assess and address this problem?

RICE: Well, thank you.

We did have a structural problem, and structural problems take some time to address.

We did have a national security policy directive asking the CIA, through the foreign intelligence board, headed by Brent Scowcroft, to review its intelligence activities, the way that it gathered intelligence. And that was a study that was to be completed.

The vice president was, a little later in, I think, in May, tasked by the president to put together a group to look at all of the recommendations that had been made about domestic preparedness and all of the questions associated with that; to take the Gilmore report and the Hart-Rudman report and so forth and to try to make recommendations about what might have been done.

We were in office 233 days. And the kinds of structural changes that have been needed by this country for some time did not get made in that period of time.

I'm told that after the millennium plot was discovered, that there was an after-action report done and that some steps were taken. To my recollection, that was not briefed to us during the transition period or during the threat spike.

But clearly, what needed to be done was that we needed systems in place that would bring all of this together. It is not enough to leave this to chance.

If you look at this period, I think you see that everybody -- the director of the CIA -- Louis Freeh had left, but the key counterterrorism person was a part of Dick Clarke's group.

And with meeting with him and, I'm sure, shaking the trees and doing all of the things that you would want people to do, we were being given reports all the time that they were doing everything they could. But there was a systemic problem in getting that kind of shared intelligence.

One of the first things that Bob Mueller did post-9/11 was to recognize that the issue of prevention meant that you had to break down some of the walls between criminal and counterterrorism, between criminal and intelligence.

The way that we went about this was to have individual cases where you were trying to build a criminal case, individual offices with responsibility for those cases. Much was not coming to the FBI in a way that it could then engage the policymakers.

So these were big structural reforms. We did some things to try and get the CIA reforming. We did some things to try and get a better sense of how to put all of this together.

But structural reform is hard, and in seven months we didn't have time to make the changes that were necessary. We made them almost immediately after September 11th.

FIELDING: Well, would you consider the problem as solved today?

RICE: I would not consider the problem solved. I believe that we have made some very important structural changes.

The creation of a Department of Homeland Security is an absolutely critical issue, because the Department of Homeland Security brings together INS and the Customs Department and the border people and all of the people who were scattered -- Customs and Treasury and INS and Justice and so forth -- brings them together in a way that a single secretary is looking after the homeland every day.

He's looking at what infrastructure needs to be protected. He's looking at what state and local governments need to do their work. That is an extremely important innovation.

I hope that he will have the freedom to manage that organization in a way that will make it fully effective, because there are a lot of issues for Congress in how that's managed.

We have created a threat terrorism information center, the TTIC, which does bring together all of the sources of information from all of the intelligence agencies -- the FBI and the Department of Homeland Security and the INS and the CIA and the DIA -- so that there's one place where all of this is coming together.

And of course the Patriot Act, which permits the kind of sharing that we need between the CIA and the FBI, is also an important innovation.

But I would be the first to tell you -- I'm a student of institutional change. I know that you get few chances to make really transformative institutional change.

And I think that when we've heard from this commission and others who are working on other pieces of the problem, like, for instance, the issues of intelligence and weapons of mass destruction, that this president will be open to new ideas.

I really don't believe that all of our work is done, despite the tremendous progress that we've made thus far.

FIELDING: Well, I promise you that we're going to respond to that, because that is really a problem that's bothering us, is that it doesn't appear to us, even with the changes up until now, that it's solved the institutional versus institutional issues, which -- maybe it has, but, you know, it's of grave concern to us.

I would also ask -- I don't want to take the time today, but I would ask that you provide our commission, if you would with your analysis on the MI-5 issue. As you know, it's something we're going to have to deal with, and we're taking all information aboard that we may. So we'd appreciate that if you could supply that to us.

RICE: I appreciate that.

I want to be very clear. I think that we've made very important changes. I think that they are helping us tremendously.

Every day now in the Oval Office in the morning, the FBI director and the CIA director sit with the president, sharing information in ways that they would have been prohibited to share that information before.

So very important changes have taken place. We need to see them mature. We need to know how it's working. But we also have to be open to see what more needs to be done.

FIELDING: It may be solved at the top. We've got to make sure it's solved at the bottom.

RICE: I agree completely.

FIELDING: And kind of related to that, we've heard testimony, a great deal of it, about the coordination that took place during the millennium threat in 1999 where there were a series of principals meetings and a lot of activity, as we are told, which stopped and prevented incidents. It was a success. It was an intelligence success. And there had to be domestic coordination with foreign intelligence, but it seemed to work.

The time ended, the threat ended, and apparently the guard was let down a little, too, as the threat diminished.

Now, we've also heard testimony about what we would call the summer threat, the spike threat, whatever it is in 2001. A lot of chatter -- you shared some of it with us directly -- a lot of traffic, and a lot of threats.

And during that period -- actually you put in context, I guess it was the first draft of the NSPD was circulated to deputies. But right then, when that was happening, the threats were coming in, and it's been described as a crescendo and hair on fire and all these different things.

At that time the CSG handled the alert, if you will. And we've heard testimony about Clarke warning you and the NSC that State and CIA and the Pentagon had concerns and were convinced there was going to be a major terrorist attack.

On July 5th, I believe it was, domestic agencies, including the FBI and the FAA, were briefed by the White House. Alerts were issued. The next day, the CIA told the CSG participants, and I think they said they believed the upcoming attack would be spectacular, something quantitatively different from anything that had been done to date.

So everybody was worried about it. Everybody was concentrating on it. And then later the crescendo ended, and again it abated.

But of course, that time the end of the story wasn't pleasant.

Now, during this period of time, what -- and I'd like you to just respond to several points -- what involvement did you have in this alert? And how did it come about that the CSG was handling this thing as opposed to the principals?

Because candidly it's been suggested that the difference between the 1999 handling and this one was that you didn't have the principals dealing with it; therefore, it wasn't given the priority; therefore, the people weren't forced to do what they would otherwise have done, et cetera. You've heard the same things I've heard.

And would it have made a real difference in enhancing the exchange of intelligence, for instance, if it had been the principals?

I would like your comments, both on your involvement and your comments to that question. Thank you.

RICE: Of course. Let me start by talking about what we were doing and the structure we used. I've mentioned this.

The CSG, yes, was the counterterrorism group, was the nerve center, if you will. And that's been true through all crises. I think it was, in fact, a nerve center as well during the millennium, that they were the counterterrorism experts, they were able to get together. They got together frequently. They came up with taskings that needed to be done.

I would say that if you look at the list of taskings that they came up with, it reflected the fact that the threat information was from abroad. It was that the agencies like the Department of State needed to make clear to Americans traveling abroad that there was a danger, that embassies needed to be on alert, that our force protection needed to be strong for our military forces.

The Central Intelligence Agency was asked to do some things. It was very foreign policy or foreign threat-based as well. And of course, the warning to the FBI to go out and task their field agents.

RICE: The CSG was made up of not junior people, but the top level of counterterrorism experts. Now, they were in contact with their principals.

Dick Clarke was in contact with me quite frequently during this period of time. When the CSG would meet, he would come back usually through e-mail, sometimes personally, and say, here's what we've done. I would talk everyday, several times a day, with George Tenet about what the threat spike looked like.

In fact, George Tenet was meeting with the president during this period of time so the president was hearing directly about what was being done about the threats to -- the only really specific threats we had -- to Genoa, to the Persian Gulf, there was one to Israel. So the president was hearing what was being done.

The CSG was the nerve center. But I just don't believe that bringing the principals over to the White House every day and having their counterterrorism people have to come with them and be pulled away from what they were doing to disrupt was a good way to go about this. It wasn't an efficient way to go about it.

I talked to Powell, I talked to Rumsfeld about what was happening with the threats and with the alerts. I talked to George. I asked that the attorney general be briefed, because even though there were no domestic threats, I didn't want him to be without that briefing.

It's also the case that I think if you actually look back at the millennium period, it's questionable to me whether the argument that has been made that somehow shaking the trees is what broke up the millennium period is actually accurate -- and I was not there, clearly.

But I will tell you this. I will say this. That the millennium, of course, was a period of high threat by its very nature. We all knew that the millennium was a period of high threat.

And after September 11th, Dick Clarke sent us the after-action report that had been done after the millennium plot and their assessment was that Ressam had been caught by chance -- Ressam being the person who was entering the United States over the Canadian border with bomb-making materials in store.

I think it actually wasn't by chance, which was Washington's view of it. It was because a very alert customs agent named Diana Dean and her colleagues sniffed something about Ressam. They saw that something was wrong. They tried to apprehend him. He tried to run. They then apprehended him, found that there was bomb- making material and a map of Los Angeles.

Now, at that point, you have pretty clear indication that you've got a problem inside the United States.

I don't think it was shaking the trees that produced the breakthrough in the millennium plot. It was that you got a -- Dick Clarke would say a "lucky break" -- I would say you got an alert customs agent who got it right.

And the interesting thing is that I've checked with Customs and according to their records, they weren't actually on alert at that point.

So I just don't buy the argument that we weren't shaking the trees enough and that something was going to fall out that gave us somehow that little piece of information that would have led to connecting all of those dots.

In any case, you cannot be dependent on the chance that something might come together. That's why the structural reforms are important.

And the president of the United States had us at battle station during this period of time. He expected his secretary of state to be locking down embassies. He expected his secretary of defense to be providing force protection.

He expected his FBI director to be tasking his agents and getting people out there. He expected his director of central intelligence to be out and doing what needed to be done in terms of disruption, and he expected his national security advisor to be looking to see that -- or talking to people to see that that was done.

But I think we've created a kind of false impression -- or a not quite correct impression -- of how one does this in the threat period. I might just add that during the China period, the 11 days of the China crisis, I also didn't have a principals meeting.

FIELDING: Thank you, Dr. Rice.

Thank you, Mr. Chairman.

KEAN: Thank you, Commissioner Fielding.

Commissioner Gorelick?

GORELICK: Dr. Rice, thank you for being here today.

I'd like to pick up where Fred Fielding and you left off, which is this issue of the extent to which raising the level to the Cabinet level and bringing people together makes a difference.

And let me just give you some facts as I see them and let you comment on them.

First of all, while it may be that Dick Clarke was informing you, many of the other people at the CSG-level, and the people who were brought to the table from the domestic agencies, were not telling their principals.

Secretary Mineta, the secretary of transportation, had no idea of the threat. The administrator of the FAA, responsible for security on our airlines, had no idea. Yes, the attorney general was briefed, but there was no evidence of any activity by him about this.

You indicate in your statement that the FBI tasked its field offices to find out what was going on out there. We have no record of that.

The Washington field office international terrorism people say they never heard about the threat, they never heard about the warnings, they were not asked to come to the table and shake those trees.

SACs, special agents in charge, around the country -- Miami in particular -- no knowledge of this.

And so, I really come back to you -- and let me add one other thing. Have you actually looked at the -- analyzed the messages that the FBI put out?

RICE: Yes.

GORELICK: To me, and you're free to comment on them, they are feckless. They don't tell anybody anything. They don't bring anyone to battle stations.

And I personally believe, having heard Coleen Rowley's testimony about her frustrations in the Moussaoui incident, that if someone had really gone out to the agents who were working these issues on the ground and said, "We are at battle stations. We need to know what's happening out there. Come to us," she would have broken through barriers to have that happen, because she was knocking on doors and they weren't opening.

(APPLAUSE)

So I just ask you this question as a student of government myself, because I don't believe it's functionally equivalent to have people three, four, five levels down in an agency working an issue even if there's a specialist. And you get a greater degree of intensity when it comes from the top. And I would like to give you the opportunity to comment on this, because it bothers me.

RICE: Of course.

First of all, it was coming from the top because the president was meeting with his director of central intelligence. And one of the changes that this president made was to meet face to face with his director of central intelligence almost every day.

I can assure you, knowing government, that that was well understood at the Central Intelligence Agency, that now their director, the DCI had direct access to the president.

Yes, the president met with the director of the FBI -- I'll have to see when and how many times -- but of course he did, and with the attorney general and with others.

But in a threat period -- and I don't think it's a proper characterization of the CSG to say that it was four or five levels down, these were people who had been together in numerous crises before and it was their responsibility to develop plans for how to respond to a threat.

Now, I would be speculating, but if you would like, I will go ahead and speculate to say that one of the problems here was there really was nothing that looked like it was going to happen inside the United States.

The threat reporting was -- the specific threat reporting was about external threats: about the Persian Gulf, about Israel, about perhaps the Genoa event.

It is just not the case that the August 6th memorandum did anything but put together what the CIA decided that they wanted to put together about historical knowledge about what was going on and a few things about what the FBI might be doing.

And so, the light was shining abroad. And if you look at what was going -- I was in constant contact to make sure that those things were getting done with the relevant agencies -- with State, with Defense and so forth.

GORELICK: Now...

RICE: We just have a different view of this.

GORELICK: Yes, I understand that. But I think it's one thing to talk to George Tenet, but he can't tell domestic agencies what to do.

Let me finish.

RICE: Yes.

GORELICK: And it is clear that you were worried about the domestic problem, because, after all, your testimony is you asked Dick Clarke to summons the domestic agencies.

Now, you say that -- and I think quite rightly -- that the big problem was systemic, that the FBI could not function as it should, and it didn't have the right methods of communicating with the CIA and vice versa.

At the outset of the administration, a commission that was chartered by Bill Clinton and Newt Gingrich, two very different people covering pretty much the political spectrum, put together a terrific panel to study the issue of terrorism and report to the new administration as it began. And you took that briefing, I know.

That commission said we are going to get hit in the domestic, the United States, and we are going to get hit big; that's number one. And number two, we have big systemic problems. The FBI doesn't work the way it should, and it doesn't communicate with the intelligence community.

Now, you have said to us that your policy review was meant to be comprehensive. You took your time because you wanted to get at the hard issues and have a hard-hitting, comprehensive policy. And yet there is nothing in it about the vast domestic landscape that we were all warned needed so much attention.

Can you give me the answer to the question why?

RICE: I would ask the following. We were there for 233 days. There had been recognition for a number of years before -- after the '93 bombing, and certainly after the millennium -- that there were challenges, if I could say it that way, inside the United States, and that there were challenges concerning our domestic agencies and the challenges concerning the FBI and the CIA.

We were in office 233 days. It's absolutely the case that we did not begin structural reform of the FBI.

Now, the vice president was asked by the president, and that was tasked in May, to put all of this together and to see if he could put together, from all of the recommendations, a program for protection of the homeland against WMD, what else needed to be done. And in fact, he had hired Admiral Steve Abbot to do that work. And it was on that basis that we were able to put together the Homeland Security Council, which Tom Ridge came to head very, very quickly.

But I think the question is, why, over all of these years, did we not address the structural problems that were there, with the FBI, with the CIA, the homeland departments being scattered among many different departments?

And why, given all of the opportunities that we'd had to do it, had we not done it?

And I think that the unfortunate -- and I really do think it's extremely tragic -- fact is that sometimes until there is a catastrophic event that forces people to think differently, that forces people to overcome all customs and old culture and old fears about domestic intelligence and the relationship, that you don't get that kind of change.

And I want to say just one more thing, if you don't mind, about the issue of high-level attention.

The reason that I asked Andy Card to come with me to that meeting with Dick Clarke was that I wanted him to know -- wanted Dick Clarke to know -- that he had the weight not just of the national security advisor, but the weight of the chief of staff if he needed it. I didn't manage the domestic agencies. No national security advisor does.

And not once during this period of time did my very experienced crisis manager say to me, "You know, I don't think this is getting done in the agencies. I'd really like you to call them together or make a phone call."

In fact, after the fact, on September 15th, what Dick Clarke sent me -- and he was my crisis manager -- what he sent me was a memorandum, or an e-mail that said, "After national unity begins to break down" -- again, I'm paraphrasing -- "people will ask, did we do all that we needed to [Page Limit]